And yes, it tarnishes Dems.
Headline at Halperin's The Page at time.com: PAULSON TO DEMS: "DON'T BLOW THIS UP".
The item links to an ABC News bulletin headlined, "Bailout Talks Go On Amid Presidential Scuffle." The report includes mention that when Secretary of the Treasury Henry Paulson ran into senior Democrats in the White House today during all-day negotiations he reportedly said, "Please don't blow this up."
House Speaker Rep. Nancy Pelosi, D-Calif., reportedly shot back, "We're not the ones trying to blow this up. It's the House Republicans."
To which Paulson replied, "I know, I know; it's both sides." [Emphasis added.]
Halperin's screaming headline makes only one point: Paulson thinks Dems, and Dems alone, will be responsible if the bailout fails. But the article itself makes perfectly clear Paulson himself does not believe that.